Insurance can be difference in businesses reopening after fire

Feb. 09--Flames demolished T-Ray's Bar and Grill in Roslyn in the early morning hours of Sept. 21.

Day County Sheriff Barry Hillestad said all that has been released about T-Ray's fire is that it was started by suspicious means, which the state fire marshal echoed. Tony Mangan, public information officer for South Dakota's Department of Public Safety, said the state has only determined and released that an "intentionally set fire was started to cover up a burglary."

The new owner of T-Ray's, Patti Mitchell, is hoping to rebuild -- with a little help from some friends.

"Many people think we're rebuilding because of insurance, but we're not. We only had a third of the insurance (needed to cover the loss)," Mitchell said.

By law, businesses are not required to have physical coverage of buildings or personal property.

However, "having a business insurance policy in place helps a company get back to normal, day-to-day operations faster and with less financial stress," Trevor Steen, insurance agent at Dacotah Bank, said in an email.

It also protects financial obligations to lending institutions, he said.

While there are many different types of insurance, property insurance and loss of income insurance would both be relevant in the event of a fire, Steen said. The property insurance would cover the business's building and personal property inside. Loss of income insurance would kick in to cover necessary expenses due to the claim.

To date, Mitchell has secured a 2016 liquor license and submitted a building permit.

While she still needs to secure financing, she is hopeful someone may want to partner with her to get the business going. Mitchell has been sporadically purchasing used equipment and supplies.

When it comes to paying out claims, sometimes the cause, or "peril," matters more than others.

"Perils to insure against and loss valuation are two factors to consider when insuring a building and personal property. A named peril allows for coverage if the cause of loss is specifically named in the insurance policy ... Open peril coverage allows all causes of loss to be covered except for what is excluded in the policy," Steen said.

Arson does not necessarily negate insurance coverage.

When a business has significant loss and needs to be rebuilt, the appropriate policy should provide adequate rebuilding costs. However, if the business chooses not to rebuild, the insurance company will pay out a lower amount than the claim, Steen said.

If the cause was excluded from the policy, the loss is not covered, he said.

Steen suggests business owners discuss options with insurance agents to determine what coverage is needed and for how much. Rates vary from company to company. Additional factors that affect the cost of business insurance include exposure, payroll, number of employees and more.

Furthermore, location and age also play a role. Because many of the area's fires have involved older buildings, it's not uncommon to suspect a default in electrical wiring. Steen said newer or updated buildings receive more credits than do ones that are older.

Insurers also consider the distance to a responding fire department.

"Insurance companies also look at the distance and determine (whether), in the event of a fire, the building would be completely destroyed before the fire department gets on site," Steen said.

Simply put, being close to a fire station is more beneficial to the insured.

Even without insurance, Mitchell is adamant about rebuilding the business she loved.

As the only restaurant in Roslyn, T-Ray's was home to the local Senior Meals program.

"We were up to 30 meals per day," Mitchell said.

The program is one of the key reasons her heart is set on rebuilding the business, which was owned by her son and his wife at the time of the fire.

"The seniors have no place to eat. My heart goes out to them," Mitchell said.

Many Roslyn area seniors now travel to Eden for their meals, while others choose to eat at the nursing home.

The "coffee girls," as Mitchell refers to them, now enjoy their morning joe at the city office, but they keep asking Mitchell when they can expect to meet at T-Ray's again.

"We weren't getting rich off it or anything," Mitchell said. "It's just needed in Roslyn."

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